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The other shoe has dropped. Last November, United Healthcare  announcing they were considering exiting the Obamacare exchange marketplace because they lost almost a half a billion dollars selling Obamacare plans. Earlier this week it was announced that United Healthcare, the country’s largest insurer announced that they will pull out of Arkansas, Georgia and Michigan exchanges.
Today United Healthcare announced the will indeed stop offering plans in most of the healthcare exchanges.

 

But UnitedHealth Group hasn’t fared so well in the exchanges created in many states by the Affordable Care Act. In an earnings call with investors Tuesday, UnitedHealth Group’s CEO Stephen Hemsley said that the smaller market size, and the higher risks in the short term of those exchanges are limiting the company’s ability to continue providing services. While the company services 795,000 people through public marketplaces as of March, that number is expected to drop to 650,000 by December.

 

“Next year we will remain in only a handful of states,” Hemsley said, adding that the company doesn’t plan to have financial exposure to any exchanges in 2017.

Hemsley added “The smaller overall market size and shorter-term, higher-risk profile within this market segment continue to suggest we cannot broadly serve it on an effective and sustained basis.”

As we reported last week even more companies are warning they may drop their exchange plans:

“Something has to give,” said Larry Levitt, an expert on the health law at the Kaiser Family Foundation. “Either insurers will drop out or insurers will raise premiums.”

And the insurers are looking for huge increases to reverse their loses:

The Blue Cross Blue Shield Association released a widely publicized report last month that said new enrollees under ObamaCare had 22 percent higher medical costs than people who received coverage from employers.

Aetna’s CEO Mark Bertolini said in February that he was concerned about the Obamacare risk pools (the balance of healthy and sick enrollees in a plan).  Apparently the risk pools for Obamacare have been weighted more toward the sicker enrollees than the insurance companies first estimated, leading to higher payouts. “We continue to have serious concerns about the sustainability of the public exchanges,”Bertolini said.

In the end more insurance companies will leave Obamacare unless they receive large premium increases so they can stop losing money.  Which is exactly what people predicted six years ago when the bill was first passed.

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